The Morning Risk Report: Sexual Harassment Jars With Changing Culture

The rape, assault and harassment allegations against Hollywood producer Harvey Weinstein illustrate the business risk such incidents can pose for companies. In the days since Mr. Weinstein's firing, his namesake firm has considered a name change and it lost its imprint at a publisher. Further reporting indicates the board knew about payouts to women since 2015 and that there was a network of employees and executives who aided and abetted Mr. Weinstein's alleged conduct. Mr. Weinstein has said he will seek therapy and asked for a second chance. But, as two observers said, Mr. Weinstein's career crashed on the rocks of changing corporate culture.

Where the rapacity of powerful men who harassed women in the workplace used to be kept private and dealt with internally, now victims have new ways to get their stories out to the public, and a vessel of support that didn't widely exist. "They're forcing the company to deal with the issue the way it should've been dealt with in the beginning. You can't sweep it under the rug any more...Individuals have a lot more control over their own personal stories today," said Ingrid Fredeen, a vice president of online learning content at compliance software and services firm Navex Global who develops anti-harassment compliance training. Ms. Fredeen said compliance professionals should encourage a culture where employees trust internal reporting mechanisms and issues are resolved properly without retaliation. "That's why people go external [now]," she said.

Heidi Moore, a business news editor and a digital news strategist, wrote a piece on LinkedIn about how sexual harassment should be seen as a business risk. Citing the case of Mr. Weinstein, and others, Ms. Moore wrote that companies should start thinking about settlements over sexual harassment as a bad investment, noting that non-disclosure agreements don't prevent scandals and they're rarely enforced. Fire the offending executives before they take everyone else down with them, she wrote. "Harboring a sexual harasser, however connected, powerful or brilliant, poses a far more significant business risk than simply firing the executive," she wrote.

Trump expected to not certify Iran compliance.President Donald Trump is expected to announce on Friday that he won’t certify Iran is complying with the 2015 multinational nuclear agreement and will take Tehran to task more broadly for practices ranging from missile tests to support of violent groups, the WSJ reports. U.S. officials said the refusal to certify Iran's compliance doesn't mean the U.S. will pull out of the deal.

Banks to pay up over Libor rigging.Citigroup, Deutsche Bank, and HSBC Holdings PLC have agreed to pay about $132 million in total to resolve accusations they rigged Libor, a lending benchmark, according to court documents.If a court approves the settlements, the money would go to compensate those who lost money because of the alleged manipulation.HSBC said it was pleased the matter was resolved, Citigroup declined to comment and Deutsche Bank couldn't be reached Thursday evening.

John Flint is HSBC's new CEO. The bank said it was pleased with a Libor-rigging settlement. Bloomberg News

Police look again at Weinstein allegations.Authorities in New York are re-examining allegations of sexual abuse by Harvey Weinstein, raising the prospect the producer could face criminal charges, the WSJ reports.New York Police Department Chief of Detectives Robert Boyce this week ordered the Special Victims Division to re-examine the evidence of an alleged assault in 2015. A representative for Mr. Weinstein didn’t respond to a request for comment.

DATA SECURITY

IRS suspendsEquifax contract. The Internal Revenue Service temporarily suspended a $7.1 million data-security contract it has with Equifax Inc., it said late Thursday, CBS News reports. Equifax said in September that hackers had gained access to data such as Social Security numbers on as many as 143 million Americans. The IRS move followed news this week that malware had been found on the credit-reporting firm's website.

GOVERNANCE

CEO of Samsung Electronicsto resign. In a surprise move, Samsung Electronics Chief Executive Kwon Oh-hyun said he will step down, acknowledging the firm faces an “unprecedented crisis” and is struggling to find new growth prospects, the WSJ reports. The move amplifies concerns over leadership at Samsung, which is already challenged by the absence of its de facto leader, Lee Jae-yong, who was convicted in August for bribing South Korea’s former president.

An employee helps a customer make a purchase at a Samsung store in Seoul.

Reuters

Hostess chief to retire.Hostess Brands joined the ranks of food companies changing leaders as Bill Toler said he plans to retire in March, just over a year after taking the Twinkie-maker public again. Mr. Toler was tapped by private-equity firms that bought Hostess out of liquidation in 2013 to help revive the snack maker.

REPUTATION

Harassment claim hits stock picker. Gavin Baker, a star stock picker at the mutual-fund giant Fidelity Investments was fired last month for allegedly sexually harassing a junior female employee, according to an attorney for the female employee and other people familiar with the matter, the WSJ reports. A spokesman for Mr. Baker says he “strenuously” denies any “supposed” allegations of sexual harassment.

MGM disputes timeline in shooting.MGM Resorts International, the owner of the Mandalay Bay Resort and Casino, is officially disputing the police account of when a security guard was shot by Las Vegas gunman Stephen Paddock, the WSJ reports. Initially, police credited the guard with distracting Paddock during the shooting. But Monday, police said the guard was shot nearly six minutes before Paddock began firing on the crowd. MGM now says it's confident that the timing stated by police isn't accurate. A Las Vegas police spokeswoman declined to comment.

Amazon puts entertainment chief on leave.Amazon.com has suspended the head of its entertainment studio, Roy Price, in the wake of allegations of mismanagement and sexual harassment, the WSJ reports. Mr. Price’s suspension comes soon after a female producer went public about a 2015 sexual-harassment complaint she made against him and after actress Rose McGowan criticized Amazon for being in business with Harvey Weinstein, the former Weinstein Co. co-chairman who was ousted amid numerous allegations of sexual harassment.

Roy Price, head of Amazon's entertainment business, is shown in 2015. Amazon suspended Mr. Price from his job on Thursday.

Richard Shotwell/Invision/Associated Press

RISK

Trump to end Affordable Care payments.The Trump administration will end billions of dollars in payments to insurers under the Affordable Care Act program, the WSJ reports. President Donald Trump has privately told at least one lawmaker that the payments may continue if a bipartisan deal is reached on heath care, according to people familiar with the matter on Capitol Hill and in the health-care industry.

PEOPLE MOVES

Nissan hires GE executive as CIO. Nissan Motor Co. has tapped a former General Electric Co. technology executive as chief information officer, as the automaker seeks to leverage digital tools to power connected cars and other revenue streams, the WSJ reports. Anthony Thomas, who served as CIO at GE Global, part of the software arm of the company, for the past two years, is expected to take over the top IT spot later this month.